I wanted to share with you important information that can protect you from falling victim to a real estate scam. It’s happening to home buyers here in Austin and around the country. In 2016, this type of real estate fraud held 16th place in terms of the number of reported complaints (12,005) but held first place in dollar losses (over $360 million).
Imagine this: After months of searching for a home and doing all the necessary paperwork to secure a loan, your closing date is just days away. You and your family can hardly wait move in. In the middle of last-minute packing, you don’t think twice about an email that appears to be from your Realtor®, lender or title company. The email instructs you to wire the closing fees to a different bank account from the one you were scheduled to use.
You stop what you’re doing to get it done. Inexplicably, you later find out that the title company didn’t receive the funds. Unbeknownst to you, offshore hackers diverted your money into their account. You are shocked. Moreover, if you can’t come up with additional funds, you’re apt to lose the home. Tragically, many buyers don’t know their money is gone until the day of closing.
How the Hackers Work
Hackers typically break into one of the real estate parties’ email accounts. Then they hack into as many of the parties’ email accounts as possible. One by one, they learn the identities of the parties by monitoring the email. Skilled hackers will go undetected because they mimic the conversational styles between the parties. They find out details about your closing and time their requests accordingly.
How to Tell Real from Fake
If you get a request to wire funds from your lender, Realtor®, or title company, regardless of how official the email looks, call to confirm the account number and the name on the receiving end. Sometimes it’s smart to look up the phone number yourself. Don’t call a phone number you don’t recognize. Additionally, after you send money, confirm that the title company received it.
I always tell my buyers to call the title company to verify the exact wiring instructions and never to believe any last minute email instructions on where to send their money.
What to Do if You Get Scammed
You may be able to get back your money if you act quickly. Call your bank immediately. Emphasize that you are a victim of fraud. Tell them to contact the recipient bank to reject the wire transfer as fraudulent.
- Report the scam to your regional FBI office. Explain that you’re a home buyer and a target of “email account compromise” in which a hacker instructed you to wire money to a fraudulent account. According to the FBI, the bureau might be able to help return or freeze the money.
- File an online complaint with the FBI’s Internet Crime Complaint Center.
- File a complaint with the FTC by selecting Scams and Rip-offs, then Impostor Scams.
In conclusion: It pays to be vigilant at all times. I make sure that all my clients know about this scam. When working with me in the buying or selling process, you can expect very close monitoring of all email correspondence and the highest level of security.